The best month for England's regions since last September today fuelled hopes the UK can escape an unprecedented triple-dip recession.
Activity increased in eight of nine English regions in January with only the North-East slipping back, according to Lloyds TSB's latest business monitor. The upturn comes despite snowfall disrupting much of the country last month and offers encouraging signs of a broader-based recovery outside London and the South-East.
Yorkshire & Humber was the strongest performer but the North-East was dragged back by renewed falls in manufacturing output, Lloyds said.
Managing director David Oldfield said: "Solid rises in private-sector staffing levels across the South-East meant that overall employment levels remained positive during January, which will come as welcome news following job cuts in the retail sector.
"Combined with an increase in new work orders at the start of the year, this will bolster hopes that client demand and opportunities for growth will steadily improve over the course of 2013."
The wider economy shrank 0.3 per cent in the final quarter of last year, putting the UK in danger of a triple-dip if a further decline is recorded in the current quarter. But analysts are hopeful a recession can be avoided after a stronger start to the year for Britain's services sector.
By contrast, BDO's Optimism Index, which predicts business performance two quarters ahead, fell to 88.9 in January from 90.3 in December – the eighth consecutive month the index has remained below 95.0, the mark that indicates growth.